Tuesday, April 24, 2007

South Carolina's Supreme Court and Attorney General Scare Off Tax Lien Investors

We've been following the story of Ned Majors, a fellow tax lien investor from South Carolina. He invests tax liens for other people, by going to the auctions for them and bidding for them (like a proxy bidder). South Carolina's Attorney General Henry McMaster, states this practice is like selling securities. South Carolina's Supreme Court apparently agrees. The court argued that though it isn't exactly like selling securities, it is similar enough that the attorney general has the authority to regulate it.

Translation: Attorney General McMaster and the Supreme Court needs to buy the book below.

The attorney general apparently wants Mr. Majors to pay license fees, taxes, and be 'regulated' like other securities company (mutual funds, brokers, etc.). This is astonishing, since the sale of tax liens help local jurisdictions and there are clear state statutes on how they are to be done. The attorney general's 'power grab' from local counties and local cities is remarkably selfish. South Carolina is now officially off limits for major tax lien investors, which removes much needed income to fund roads, schools, and other public services.

Perhaps, down the road when South Carolina starts having budget woes in their local jurisdictions, the people will remember Attorney General Henry McMaster. The poster child for scaring off investors in his state.